BestAdvice (BA): Tell us about Castle Trust’s new bridging product?
Marcus Dussard (MD): Our new bridging product is available for a flat rate of 0.67% pm, has a 12-month term and can be used for first charge buy-to-let cases up to £1 million. Because of this clear criteria, we are able to support it with a streamlined application process and dedicated team focused on delivering the fast turnaround times you would expect from a leading bridging lender.
We have seen growing demand from brokers who are working with clients on refurb projects and our new bridging loan can be used for all types of refurbishment that do not require planning permission, including refurbishments that do include building regulations.
BA: How is it different to your existing offering?
MD: Brokers probably know that we have developed a reputation for structuring creative solutions to help solve complex cases and we have prided ourselves on our unofficial motto of “if it makes sense, we’ll find a way”. The nature of these cases means they are often more involved and, while we offer terms up to five years with many products available for 12 or 24 months, the approach we take to underwriting larger complex deals often doesn’t sit neatly alongside more straightforward bridging loans.
As the demand for short-term finance has grown, however, we’ve recognised that an increasing number of brokers are looking for more straightforward bridging loans for their clients. So, we have developed a new product and service proposition that gives them just that – a quick, uncomplicated loan with simple pricing, supported by expert underwriters who understand the market.
This straightforward approach complements our existing range and means we are able to offer brokers with a more complete set of tools to help clients with different circumstances.
BA: Why have you chosen to launch into bridging now?
MD: We have always been in the short-term lending market but, in recent years, we have noticed growing demand from brokers for straightforward bridging loans. You only need to look at the recent figures from the Association of Short-Term Lenders that said the bridging market grew by 15% in 2018 to see that there is a huge amount of demand from brokers and their clients.
There has been a particular surge in demand for refurb lending, as landlords investigate new ways to achieve more value for their investment and our new bridging loan can be used for a whole range of refurbishments, including those that require building regulations.
BA: With Castle Trust in the process of applying for a banking license, can we expect more product development like this in the future?
MD: We have identified what we do best, and we will continue to deliver and enhance our offering of bridging and medium-term finance for property investors, entrepreneurs and high net worth individuals.
We operate in a competitive environment, but there is still plenty of opportunity as we expect to see the trend continue for more landlords to turn to more complex investments like HMOs, multi-units, holiday lets and student accommodation.
With growing numbers of new businesses, we also anticipate more appetite from entrepreneurs who want to tap into the equity in their property to invest in their business, and the demand for development exit loans is only likely to increase in the current environment.
Within these niches there is still room to innovate and develop products to meet market demand and that’s what we will continue to do.